Strategic planning and financial performance of small and medium enterprises

Abstract

The study was conducted to establish the role of Strategic planning on the performance of small and medium enterprises in reference to Centenary bank Jinja branch as the case study. The research objectives were; to examine the relationship between the current business situation and financial performance of Centenary Bank Limited, to investigate the role of vision and mission on the financial performance of Centenary Bank Limited and finally to find out the effect of business strategies on the financial performance of Centenary Bank Limited. The study was a case study using both qualitative and quantitative study approaches. The researcher used a sample size of 40 staff. The questionnaire method was used to collect data from the field. The data was analysed with the help of Statistical Package for Social Sciences (SPSS). The findings made indicated that the respondents agreed that the organization is performing well as per its current status. The respondents agreed that the vision and mission statements play a positive role on the financial performance of the organization. It was also found out that the respondents agreed that business strategies have a positive impact on the financial performance of the bank. In conclusion, it was established that there is a relationship between current business situation and financial performance. The study also found that the vision and mission statements play an important and positive role on the financial performance of an organization. It was also established that the business strategies have an important and positive effect on the financial performance of an organization. Therefore in general, Strategic planning was seen to play a very important and positive role towards the financial performance of SMEs The researcher made recommendations that were based on the challenges faced in strategic planning and these were; The bank should offer superior customer services, introduce new products for example Sente mobile and western union money transfer. The bank should also partner with other organizations to sponsor and provide affordable services to their customers for example KCCA and Danida, MTN and Airtel. The bank should embrace high technology in form of better and increased teller machines, E-banking products for example Automated Teller machines, E-payment services for utilities like water, electricity and NSSF. The management should also embark on staff motivation in form of rewards in order to increase staff morale so as to ensure increased productivity and sales. There should be increased accessibility of the bank by opening up new branches, targeting the commercial segments and creating more accounts which suit the rural community for example agricultural loans, group saving accounts and other soft loans. The management should also engage its employees in training services so as to improve on their skills in order to achieve increased turn over, asset base and profits. Ethical code of conduct should also be highly emphasized so as to ensure discipline among the employees of the organization.